[p2p-research] Investing in the Poor

[Ryan]

  Sent to you by Ryan via Google Reader: Investing in the Poor via
Marginal Revolution by Alex Tabarrok on 5/19/10

The Unincorporated Man is a science fiction novel in which shares of
each person's income stream can be bought and sold. (Initial ownership
rights are person 75%, parents 20%, government 5%--there are no other
taxes--and people typically sell shares to finance education and other
training.)

The hero, Justin Cord a recently unfrozen business person from our
time, opposes incorporation but has no good arguments against the
system; instead he rants on about "liberty" and how bad the idea of
owning and being owned makes him feel. The villain, in contrast, offers
reasoned arguments in favor of the system. In this scene he asks Cord
to remember the starving poor of Cord's time and how incorporation
would have been a vast improvement:

"What if," answered Hektor, without missing a beat, "instead of giving
two, three, four dollars a month for a charity's sake, you gave ten
dollars a month for a 5 percent share of that kid's future earnings?
And you, of course, get nothing if the kid dies. Now you have a real
interest in making sure that kid got that pair of shoes you sent. Now
it's in your interest to find out if he's going to school and learning
to read and write. Now maybe you'll send him that box of old clothes
you were thinking of throwing away. Under your system you write a check
and forget about the kid, who'll probably starve anyway. Under our
system, you're locked into him.

...the real benefit comes about when those 'evil, selfish, horrible
corporations' get involved. How long will it take for a business to
realize that there's a huge profit to be made in those hundreds of
millions of starving children?...Imagine a world where a bank gives a
loan to a corporation to build a school, hospital or dormitory. Not
because its the right thing to do; who cares! They'd do it because it's
the profitable thing to do. And because of that, my system, not in
spite of greed and corruption and incorporation, but because of it,
will work better than yours in any time period with any technology you
choose."

So who do you stand with, JC or Hektor?

Hat tip to Robin Hanson for lending me the book and from whom I cribbed
the description of ownership rights. Hanson offers other thoughts on
the novel. And here are earlier comments from Reihan Salam.



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